Ruling in favour of e-commerce giant Amazon, the Supreme Court on Friday (August 6) upheld Singapore’s Emergency Arbitrator (EA) award, restraining a ₹24,731 crore merger deal of Future Retail Ltd (FRL) with Reliance Retail.
A bench of Justices RF Nariman said that the tribunal’s decision was valid and enforceable under Indian Arbitration and Conciliation Act despite the fact that the term EA is not used in arbitration laws in India.
The EA Order is an order within section 17 (1) and can be enforced under Section 17(2) of the Arbitration and Conciliation Act, the bench said.
Amazon had sued partner Future Group, accusing it of breaching contract by sealing a deal to sell its retail assets to Reliance Industries for ₹24,731 crore last year.
The arbitration court in Singapore had restrained Future Group from going ahead with the deal. The court, however, is yet to give its final verdict.
On March 18, a single-judge Delhi court restrained Future Retail from proceeding with the deal and directed the assets of the company’s head Kishore Biyani to be seized and asked him to answer why he should not face a three-month jail sentence.
However, on March 22, a division bench of the Delhi High Court, acting on an appeal by Future Group, stayed the single-judge’s order.
Amazon had then moved the Supreme Court. In its petition, Amazon had called the Delhi High Court’s ruling “arbitrary” and “illegal”, adding that Amazon which has invested $6.5 billion in India would face “irreparable harm” if the apex court didn’t intervene.
Amazon in 2019 had invested in Future Group, by acquiring a 49 per cent stake in Future Coupons Ltd, which in turn hold 9.82 per cent stake in Future Retail.